Online Gaming Regulation – Service Business Potential

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Over the past two decades, online gambling has slowly morphed from a niche pastime to a common one. In 2019, this sector generated revenues of $58.9 billion, and according to the IMARC Group, that figure increased to $72 billion in 2021, set to hit $131 billion by 2027. Naturally, the COVID-19 pandemic played a factor in this industry getting a shot in the arm. Yet, many believe that powerful structural forces will carry the market beyond the pandemic boost, helping it introduce millions of new people previously unfamiliar with online gaming to this entertainment form in the coming years. Increased legalization, expanded internet penetration, technological advancements, cultural acceptance, and high-profile gambling sponsorships boost this market’s growth. So is the advent of Bitcoin gaming.

Thus, the popularity of more and more individuals testing their luck over the internet has raised many concerns about many potentially overindulging in this hobby, giving rise to businesses that aim to curb gambling addiction. These become particularly necessary due to the establishment of non-GameStop casinos or websites boasting international licenses that allow them to accept gamblers from all corners of the globe. What follows is an analysis of how different European markets are regulating online gaming and if there is any potential for establishing anti-gambling addiction services as a business in the US.

Markets With Stern Regulation

Without question, the UK is the European leader regarding gambling regulation. Its regulator, the UKGC, got up and running in 2007, thanks to the passing of the Gambling Act of 2005. It has a reputation for being the online gambling body that most looks after player safety. From 2020 on, the UKGC made GameStop, a self-exclusion network, mandatory for all its licensed operators. It also brought forward new measures that limit the level of engagement in online gambling fun. They entailed banning credit cards from UK online casinos and implementing various gameplay restrictions. In addition, the UKGC is now looking into making it obligatory for operators to perform source of funds checks. On account of these and other similar measures, many Brits have begun gravitating towards playing at casinos, not using GameStop or foreign platforms that accept UK gamblers.

The Swedish Gambling Authority, also known as Spelinspektionen, is Sweden’s body that approves and supervises all gaming activity within the country’s borders. Internet gambling became legal in Sweden in 2002, and it was in that year that the SGA got founded. Its goal was to create industry agreements that would protect Swedish consumers. Until 2019, only two state companies had the right to offer online gambling services in Sweden, but that changed when a new Gambling Act got passed, which opened up the market. SGA has a rigorous licensing process for all operators. It forces applicants to submit info concerning key company members, their financial state, a business plan, technical details concerning its systems, tax clearances, and more. The SGA has copied many of the measures pioneered by the UKGC. Some mere months after these have gotten established in the UK. SGA GamStop equivelent is Spelpaus. Hence, any gambler that activates a Spelpaus self-exclusion ban will be unable to play at any SGA-regulated site until his selected self-exclusion period passes.

Countries That Are Developing Strict Measures

It may surprise some, but many countries on the Old Continent have not yet legalized online gaming or have done so only recently. Two examples of regions that have taken the internet gambling dive in the past year are Germany and the Netherlands. In July 2021, the new German Glücksspielstaatsvertrag or State Treaty on Gambling came into force. It allowed german residents to enjoy online poker and virtual slots at internet gaming operators based in the country, operating under a state permit. The German national gambling regulator is from the German state of Saxony-Anhalt, represented by the Saxony-Anhalt State Administration Office in Halle. The Dutch market opened in October 2021, when the Kansspelautoriteit (KSA), or the Dutch Gaming Authority, issued ten licenses to gaming operators to offer their services to Netherlands’ residents.

Even though juvenile, these gaming regions have made massive strides quickly to catch up with the UK and Sweden. They introduced nationwide self-exclusion networks, OASIS in Germany and CRUKS in the Netherlands, and they are looking into passing other UKGC-like regulations soon. For example, in only six months of its existence, CRUKS reported that over ten thousand Dutch gamblers had activated a self-exclusion ban.

Territories With Lax Regulation

The mentioned casinos not on GameStop are gambling sites in countries like Panama, Curacao, Malta, and Costa Rica. These territories legalized online gaming to attract foreign investors who would use them as hubs to grow their interactive gambling businesses by basing them on their soil, taking advantage of their lax laws. Hence, the gambling body from these countries feature regulations that are not as stringent as the national regulators discussed above. Therefore, casinos not using GameStop can offer more generous bonuses, accept niche payment options, and house games unavailable in stringently-monitored markets.

A casino not on GameStop is still likely to promote responsible gambling by allowing users to set loss/deposit limits and trigger site-specific self-exclusion bans. But, they are unlikely to feature any gameplay restrictions such as lower max bet limits, wait-times between slot spins, and they will probably still permit the auto-spin function no longer available in the UK and Sweden. However, activating a site-specific self-exclusion may not be automatic on these platforms, as it may get asked that players contact the support staff and request that one becomes active.

Markets With No Regulation

Technically, a non GamStop casino is also a site with no gaming license. These are platforms where scams are most likely to happen. The term scam in the interactive gaming sphere gets used quite broadly. Some utilize it when talking about operators who do not pay out wins on time. Or, when referring to ones that intentionally drag out money removal procedures, a trick aimed to discourage gamblers from completing their withdrawals.

It should get noted that many provably fair casinos have been running on the Web for years with no license, strickly operating on a good faith basis. These platforms accept digital coins and deliver simple games that allow players to check the randomness of their result generation process. The success of provably fair sites hinges on their reputation within the crypto community. When it comes to fiat money sites, things stand a bit differently. That is because of the payment processing procedures involved. Plus, the overall gaming culture. Many shady operators open and close fiat online casinos on a whim in foreign countries with no gambling laws, leaving users with no legal discourse when they do not get paid out. They can do so because these sites look and function the same as reputable ones, tricking newbies and casual players with vague descriptions about their credibility via fake online reviews. Most of these sites do not care about responsible gambling and have no tools that stop players from over-indulging in this pastime.

What Method Do Most Players Prefer?

In terms of business, concerning helping lower gambling addiction rates, the best route for entrepreneurs is to focus on software that makes it simple for users to track their gaming activity and receive warnings when they are playing too much. Usually, universal self-exclusion schemes get run by government-formed regulators, not private entities. That excludes companies from getting into this field. They can only provide software solutions to these bodies to improve their performance, aiding them in achieving higher levels of player protection.

The ideal gambling regulation would entail a mixed offering with no gameplay restrictions, akin to the gaming fun found at non-GameStop casinos, responsible gambling measures, and a universal self-exclusion system that no one could circumvent. The goal should be to find the perfect balance between keeping everyone safe from shady operators and themselves while allowing them to enjoy games of chance as a pure form of entertainment.

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